European shares lifted to 12-month high by Italy

European shares closed at their highest in more than a year on Thursday as Italian stocks surged on relief that Rome had avoided European Union disciplinary action and rising expectations of looser monetary policy by major central banks.

Wall Street was closed as the country marked Independence Day.

The pan-European STOXX 600 index rose 0.1 per cent, extending gains to a sixth straight session on optimism that Christine Lagarde will stick to the ECB's dovish stance as the central bank's next chief.

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The Dublin market rose on the back of the positive sentiment seen across Europe, with the Iseq closing up 1 per cent to 6415.6 points.

Drinks group C&C rose 4.7 per cent to €4.11 after it announced plans to cancel its Dublin listing and expand its Five Lamps brand beyond Dublin.

Financial stocks were in focus, with Bank of Ireland up nearly 1 per cent and AIB up 1.2 per cent. Permanent TSB jumped 4.2 per cent.

Other movers in Dublin included Ryanair, which closed up 2.9 per cent, and Flutter, which rose 0.4 per cent as rival William Hill announced plans to close 700 shops in Britain.

LONDON

Britain's mining stocks tugged the main index lower, while shares of IAG and Coca Cola HBC slid as they traded ex-dividend, though several investors stayed on the sidelines during the US market holiday.

The FTSE 100 inched 0.1 per cent lower but still hovered around a 10-month high, and the FTSE 250 was roughly flat.

"It is perhaps a sign of how much trading has been driven by the US in the last couple of months that the absence of the American markets due to Independence Day left their European counterparts in neutral," said Spreadex analyst Connor Campbell.

Aer Lingus owner International Consolidated Airlines Group (IAG) skidded 5.9 per cent on its worst day since October 2017. Coca-Cola's leading bottler Coca Cola HBC slipped 6.7 per cent.

The slide in stocks trading without a dividend entitlement kept the main index from rising for a fifth straight session even though a softer-than-expected US jobs report overnight spurred hopes of interest rate cuts by the Federal Reserve.

An index of miners fell 1.4 per cent as copper prices slipped on a jump in London Metal Exchange inventories. Israel-focused gas driller Energean surged 13.7 per cent to an all-time high after saying it would buy the oil and natural gas unit of Italy's Edison.

Persimmon, Britain's second largest homebuilder, shed 1.2 per cent after it posted lower first-half revenue as increased focus on quality and improving customer service slowed order intake.

Shares of blue-chip rivals Taylor Wimpey and Berkeley gave up 1 per cent each.

First Derivatives, one of just two Northern Irish-listed companies, closed 3 per cent lower in London after news that founder and chief executive Brian Conlon had sold 1.4 million of shares in a move that netted him an estimated €47 million.

EUROPE

Milan's MIB rose 1 per cent to hit its highest level in almost a year, while its bank index soared 3.4 per cent after Italy persuaded the European Commission that new measures submitted this week would help bring its growing debt in line with EU fiscal rules.

Meanwhile, the trade-sensitive car sector rose 0.4 per cent on news that top representatives from the US and China are arranging to resume talks next week. Also helping the stocks were gains in French car parts company Valeo after it won €500 million worth of orders for its "Lidar" sensors.

Capping gains were Spanish utilities Enagas and Naturgy which slipped 4.3 per cent and 3.4 per cent respectively on a media report that Spain's antitrust authority would propose cuts to allowed returns of electricity and gas networks.

WALL STREET

US financial markets shut for Independence Day.

– Additional reporting: Reuters